In 217 BC, the Roman dictator Fabius Maximus conceived a novel strategy in the war with Carthage. His opponent, Hannibal, had won several devastating battles, and the Roman people were ready to try something different.

Fabius knew Hannibal liked to fight and had the military power to do so effectively. Instead of meeting Carthage head on, Fabius studiously avoided large confrontations. He sent small attack units to bait Carthaginian troops into unfavorable situations and then wage havoc by destroying their food supply or by simply finding ways to prolong Carthage’s march. That ended up costing Hannibal’s large army far more in resources than it did Rome.

They didn’t have chatbots in 217 BC, but there are parallels with today’s battle between Microsoft Corp. and Google.

The search war has never been much of a competition between the two companies, but it’s a profitable one. Executing a web search is fairly cheap, and the ads account for most of Google’s $283 billion in annual revenue. Microsoft managed to turn a profit on Bing, too, more than seven years ago, despite its tiny market share.

Alphabet Inc.’s Google stands to lose a lot more if there were a fundamental shift in how people search for things on the internet. That shift isn’t a given. Developing a competent, reliable chatbot is expensive. Potentially even more costly is the ongoing expense of people interacting with the product.

The computational demands of generative artificial intelligence are exorbitantly high. An analysis of open-source software similar to what drives Bing’s chatbot or Google Bard estimates the cost of a query at 11¢, according to Alan Ritter, a computing professor at Georgia Tech.

What exactly it costs Google or Microsoft is a secret. They have their own cloud infrastructures that can be optimized to work more efficiently with their proprietary chatbots, said Ritter, who studies natural language processing.

Sam Altman, a Microsoft ally who runs the startup behind ChatGPT, has only said it’s “probably single-digits cents per chat.” Morgan Stanley estimated the cost of a ChatGPT query at a more palatable 2¢. Even that is a steep premium to a traditional web search, which can be done for a fraction of a penny, Ritter said.

Perhaps a chatbot becomes so accurate that Google or Microsoft will be able to justify a substantial increase in advertising rates. That hasn’t happened.

If every web search were to suddenly switch to a chatbot conversation tomorrow, Bing’s margins would suffer, but Alphabet’s would take an absolute beating. Even in a scenario where Google appears to win, it actually loses.

This is where the Fabian strategy comes into play. For more than a decade, Microsoft’s Bing has run a traditional battle plan on Google, with paltry results. Now the hype around Microsoft’s chatbot is ratcheting up pressure on Google to match it — likely at a great cost to the company.

Meanwhile, the Bing chatbot is only available to a limited number of people — there’s still a wait list — and in a limited way — on a search engine few people use, within a similarly unpopular Microsoft web browser or in an update rolling out to Windows 11.

A creative interpretation of the strategy is that Microsoft isn’t competing to be the No. 1 search engine but that it’s attempting to reimagine aspects of search in a way that’s less lucrative for everyone — effectively luring Google into little skirmishes it won’t win. The question is whether Google engages. It has said it’ll release its own chatbot but hasn’t committed to building it into search results in the way Microsoft has.

It sure sounds like Microsoft Chief Executive Officer Satya Nadella hopes Google takes the bait, though.

“They’re the 800-pound gorilla, And I hope that, with our innovation, they will definitely want to come out and show that they can dance. And I want people to know that we made them dance.”  said Nadella in an interview with the Verge.

Mark Milian mmilian@bloomberg.net

Our results were achieved against the backdrop of an operating environment characterised by rising inflation and tightening local and global monetary policy, which have collectively continued to challenge net interest margins and cause volatility in asset prices, especially in relation to traditional financial assets.

Our proactive decision over the past 3 years to allocate capital to real estate, private equity and private credit in our portfolio has been justified given the outperformance of these asset classes in the current economic cycle relative to traditional financial assets, consistent with sound portfolio diversification principles.

As a result, we have thus far managed to weather headwinds caused by continued inflation and the accelerated rise of interest rates related to the residual effects of two years of the COVID-19 pandemic and the ongoing conflict in Eastern Europe.

We have also continued to build the capacity of our core business through investing in our talent and the overhaul of our information technology platforms. This transcends across our Group’s ecosystem as Cornerstone has made similar investments in technology at our sister company Cornerstone Trust and Merchant Bank (“CT MB”), aspects of which are the subject of an application to the Bank of Jamaica (“BOJ”) pending approval.

We acknowledge frontally the concerns and disquiet of the market and investing public caused by various emergent allegations of fraud in the industry. This, however, should be taken in the context of the positive outlook for Jamaica’s economy as objectively assessed in the IMF’s recently published Article IV consultation. At Barita, we take the trust and confidence of our customers very seriously and recognize how critical it is to our business and by extension to the stability of our financial system. We are also proud of our resilience, prudence, and the various lines of defence that have been deliberately built & strengthened since the acquisition by Cornerstone.

This resilience – which is most apparently demonstrated through our robust capital base, heavy investment in bolstering our control environment, risk management framework, and governance – positions our business well to enhance and protect shareholder value. This gives us the confidence to unequivocally undertake to fully reimburse our customers in the event of occupational fraud. Importantly, notwithstanding our position of strength, we continue to take steps to deepen our resilience, consistent with our commitment to continuous improvement, For example, the upgrade of the technology at Barita and its sister company CTMB, not only future-proofs those businesses, but are key to the mitigation of operational risks, including fraud and AML/CFT risks.

Significantly, as it relates to internal fraud in Barita, CTMB, or Cornerstone, our internal control and governance processes are designed to detect these incidents and encourage reporting to independent internal and external parties, including our regulators and law enforcement. This is supported by our Whistle-blower Policy, our Code of Conduct, our Corporate Governance Policy and other feedback loops; which ensure that no employee, related party, executive, or director, is powerful enough to be shielded from our zero-tolerance stance on internal fraud and our strict adherence to the established process and consequence management in this regard. Barita, CT MB and the Cornerstone Board continue to operate with the highest levels of integrity, prudence, and ethical standards.

Through prudent and disciplined capital injections across its operating entities, Cornerstone has ensured, post-acquisition in September 2018, the establishment of a robust back stop against financial and operational risks, as evidenced by the exemplary capital base of Barita, standing at an industry leading $34 billion as at December 2022. This strength of capital translates into a capital adequacy ratio of 35% or $25 billion in excess reserves above the regulatory minimum of 10%. Cornerstone has also heavily capitalized Barita’s sister company, CTMB which reflected an unmatched capital adequacy ratio of 64% as at September 2022, more than six (6) times the regulatory minimum for deposit taking institutions (“DTI”).

This strength of capital, in addition to providing a cushion for various risks, including fraud, gives the company immense capacity to grow and supports Barita’s stated investment focus in real estate, private equity, private credit and infrastructure.

Cornerstone’s deliberate strategy since FY 2019 of building capital across its portfolio companies to levels significantly above industry norms was informed and complemented by the implementation of best-in-class governance and control frameworks. To further ensure the protection of shareholder value, the Group engaged world class consulting partners to overhaul our policies and procedures and implement our enterprise risk management framework, on-boarded additional top talent of unquestionable ethics and integrity across our three lines of defence, bolstered the independence of our second and third lines of defence through reporting lines to the board, and ensured the independence of the chairs of our Board and its sub-committees including the Audit and Corporate Governance & Conduct Review Committees.

As the contributing elements of the alleged fraud affecting the industry emerge, it will, in addition to our embedded frequent review of emerging risks, feed the continuous improvement of our control environment that minimizes the persistence of any vulnerabilities and accelerates detection of anomalies. As stated above, our investment in technology is a key element of the continuous improvement in our control environment. While we continue to overhaul Barita’s technology, we look forward BOJ’s approval of CTMB’s technology and core system upgrades.

We welcome the strengthening of the regulatory environment and look forward to contributing to the outcome of the consolidated regulatory oversight of DTIs and Securities Dealers (“SD”). This is especially as Cornerstone continues to advance the process of obtaining approval to reorganize Barita and its sister company, CTMB, under a Financial Group which will allow us to seamlessly serve a wider range of our customers’ financial affairs.

Mark Myers, Chairman Of Barita Investments Limited

Barita Investments Limited (BIL) Unaudited Financial Statements For The First Quarter Ended December 31, 2022

NCB Capital Markets is proud to be associated with the JSE’s annual conference for a 7th consecutive year as the lead regional sponsor. This year’s theme the “Capital Markets Redefined Achieving the Impossible” is very relevant given the global events over the past 3 years and the trends we are seeing globally, locally and I dare say regionally.

Tonight I had planned to speak on the Revival of the Entrepreneurial Spirit and the Redefinition of the capital markets…and I still will. Entrepreneurship is the engine of any economy and the capital market plays an important role in fueling that engine. I will explore the Jamaican experience and identify the lessons, which are applicable not just for Jamaica, but to the wider region as well.

However, it would be remiss of me, bordering on irresponsible, not to use this platform, as President of the Jamaica Dealers Securities Dealers Association (JSDA), to speak on the topic that is now dominating the local press. I was expecting 2023 to be a year of reprieve for the industry, having weathered the COVID-19 pandemic and the inflation crisis over the last three years. But, here we are with our own local situation, one that is threatening the reputation of our securities industry and public confidence in the financial system. As such, I will also address this in my presentation.

In the midst of this ordeal, I chose to keep my speech focused on the revival of the entrepreneurial spirit because while we as a nation solidify the transparency and security of our financial markets to rebuild confidence, the need for stronger economic growth, enhanced competitiveness, and greater job creation still exists.

A strong financial system is a key enabler of a thriving economy, which creates a high standard of living and quality of life for citizens. With that still being a goal, we must then ensure that financial markets can continue to play its role of providing resources for the innovative and productive ideas that will fuel development.

ENTREPRENEURSHIP

To start our conversation let’s look at the benefit of entrepreneurship to the economy; and I am going to focus on 3 benefits:

Firstly, entrepreneurship improves productivity as it injects the economy with a fresh batch of higher productivity firms. As such, it increases competition among existing businesses, and pushes out less-productive ones.

Secondly, entrepreneurship spurs innovation as new firms are disproportionately responsible for commercializing new innovations, particularly radical innovations that spawn entirely new markets or substantially disrupt existing markets.

Lastly, Entrepreneurship creates jobs as new and young businesses are the engine of net job creation in the economy.

LOCAL FINANCIAL CRISIS

In looking at the culture of entrepreneurship in Jamaica and how it has evolved, I am going to take us back three decades to a dark period in our economic history, that is, the financial sector crisis of the 90s. I believe it important that we understand the impact it has had on the psyche of our citizens, and what it did to the local entrepreneurial mindset.

In the early 1990s, in response to rapid depreciation in the local currency and spiraling inflation that had risen to as high as 80%, the government and the central bank sought to stabilize the economy and the exchange rate by pursuing a high- interest rate policy.

This high-interest rate policy played a meaningful role in the financial crisis of the 1990s and in subduing the entrepreneurial spirit because the interest rates at which banks lent to borrowers rose to prohibitively high levels. As the government raised interest rates to reduce liquidity in the economy, commercial banks quickly raised the rates at which they lent money to businesses.

According to BOJ data, the average lending rate for commercial banks rose from 34.5% in 1990 to 62.3% in 1994. As a matter of fact, in early 1994, a survey conducted by the Financial Gleaner revealed that banks such as Century National Bank, Jamaica Citizens Bank and Worker’s Bank were lending at rates that were as high as 65%-69% per annum.

The fallout from the financial crisis truly stifled entrepreneurship for two generations. Many businesses failed, with some entrepreneurs owing money to this day. The non-performing loans in the sector at the time accounted for 24.9% of GDP compared to the average of 1.2% over the last 5 years.

Allow me to paint a picture for you, an illustration… imagine an entrepreneur with a 15-year commercial (or residential) mortgage with a debt servicing ratio of 1.25 times, implying he has a 25% cash flow buffer to support loan payments. Let’s say that facility has a loan to value of 80%. A 20 percentage points interest rate rise, similar to what would happened in the 90s, would result in a cost of debt increase of approximately 70%…decimating his cash flows. He would likely be forever debt riddled because the recoverable value of the underlying collateral would likely be below the loan amount because of likely systemic fallout in the system.

The environment effectively killed the entrepreneurial spirit, as additionally, those that were fortunate to have liquidity opted for the easy route of placing money on fixed income securities earning high/double digit interest rates. In retrospect, one cannot blame them. Why take on the hassle and risks of running a business when your alternative is earning north of 30% per annum in relatively low risk fixed income investments?

That experience did not just kill a generation of entrepreneurs, it created a mindset of conservatism for years to come. The subsequent generation – my generation – which was either in the secondary or tertiary education system at the time, developed a conservative mindset.

The modus operandi of that generation was to do well in school so that you could land a job with a blue-chip company; preferably a firm that had international backing. Working for a small company was undesirable, becoming an entrepreneur was a no no. Entrepreneurship was a bad word and viewed as being for those that couldn’t get the desirable jobs at the time. In aggregate, I would argue, the outcomes of that period have stifled the economy for approximately two and half decades.

CURRENT ENVIRONMENT

With average GDP growth of 1.4% since Independence 60 years ago, our economy has endured some challenging times. It is these times and a spirit of flexibility/adaptability that makes us the resilient country that we are. The much needed macro-economic stability driven by reforms coming out of the more than a decade-old IMF agreement, coupled with financial sector innovation, is once again spurring entrepreneurship.

So we are we seeing today:

– many of the bright creative minds leaving the education system having the pursuit of entrepreneurship on their career roadmap. This is also reflected in the listing of a number of junior market companies controlled by individuals in their sub 40s.

– the emergence of a private equity culture, which has been enabled by the successes of our junior market and other financial innovation.

– the stock market, especially the junior market, being an avenue for entrepreneurs to raise funding to scale their operations.

– with lower interest rates and improved macroeconomic fundamentals, a lot of the so called “old money” are looking at private equity opportunities, in support of entrepreneurism, to diversify and create wealth.

The trend we are seeing currently, shouldn’t be taken lightly and must be nurtured for us to truly experience the transformation that we need as a country and deserve as a people. Jerry Moran, an American lawyer and politician, notes that “Innovation and entrepreneurship are the opportunity and best opportunity we have to grow the economy.”

RECOMMENDATIONS

With an ever changing global landscape and the accelerated pace of globalization, developing countries are at risk of seeing an increase in income inequality given changes in trade, technology and employment patterns. The last three years have seen an acceleration of these changes.

What is clear in my mind is that countries like ours must either adapt or face the consequence of being left behind. Doing nothing is not an option. With our resilience, improving macro-economic fundamentals and a renewed entrepreneurial drive, supported by an innovative financial sector, there is an opportunity to transform our economy and be on a path of a much higher rate of economic growth.

I want to share with you three themes that will be important to our success as a nation. They are:

– Identifying and leveraging competitive advantages;

– Seeking scale;

– Creating and retaining talent.

Identifying and leveraging competitive advantages

The manufacturing of goods and provision of services are becoming increasingly competitive, driven largely by technological change and scale. We have seen it play in front of our eyes: industries that were growing at phenomenal rates a few decades ago are now dead, or at best, are on life support. Travel agencies and anything print- from photos to newspapers and magazines are all becoming obsolete and are just a few examples of the disruption that is ongoing. Even our own financial services industry is being disrupted by technology, with the advances in mobile, internet and ABMs, heavily staffed banking and customer-facing financial services operations are becoming a thing of the past.

Therefore, to remain relevant, as a country we need to take some tough decisions and determine where our competitive advantages lie and what we need to focus on to transform our economy and the lives of our citizenry. Countries like Singapore, Panama and China have taken bold steps, focused on their competitive advantages and have been reaping the benefits.

At home, I often ask myself the question, why is it that the two industries that Jamaica is most known for, are among the most underinvested industries in Jamaica. Globally, Jamaica is known for track and field. Where that sport is concerned, we are to the world what Brazil is to football. Why then is Sports not a major contributor to GDP? Why are the major track and field events held in Europe and not in Jamaica?

Likewise, Jamaica is world renowned for reggae music. So why is it that so many reggae festivals are held in Europe and elsewhere but not in Jamaica? Kingston, Jamaica should be to Reggae, what Nashville Tennessee is to country music.

These are both industries that have the potential to dramatically impact the citizenry at the grass root. With focus and investment, they can ultimately help to create opportunities for economic growth, employment, and aid in addressing income inequality and by extension, some of the social ills of this country.

I actually had a dream about this. I dreamt that Jamaica in 2045 was the leading destination for global athletes, entertainers and those in the creatives, to hone their craft, live and vacation. In my dream, Jamaica’s international financial center initiative had allowed us to become the leading wealth management hub for world’s most famous athletes, irrespective of sport, and all the world’s largest wealth management firms were domiciled here.

Finding those niches and committing to them can result in transformation at scale, which takes me to the next theme, which is seeking Scale.

Scale

Jamaica has a population of 3 million people. The world population is just under 8 billion people. With globalization, enabled by technology, there is unprecedented access to a market that is almost three thousand times that of our own.

However, to be a meaningful global player, it is always better to do it as a collective. The population of the English Caribbean is twice the size of Jamaica at 6 million people. If you consider the entire Caribbean, we are speaking of a population of 44 million, which is a decent size. Collectively that is larger than the Canadian population, almost as large as Spain’s and two thirds the size of the United Kingdom.

As a collective, we have enough similarities and differences to make us a potent force on a global level. I am encouraged by the work being done by the Caribbean Private Sector Organization (CPSO), whose Agenda is that of supporting the full implementation of the CARICOM Single Market and Economy (CSME) and advancing Private Sector priorities in the Caribbean Community.

One of the recent initiatives of the CPSO is to bring together the regional capital markets. A topic that is back on the front burner, and I note Dr. Street-Forrest’s remarks earlier and that discussions also took place at the Trinidad & Tobago Stock Exchange’s conference in October last year. A notion of a regional exchange and/or market have been on the table for years; however, the relevance of such a construct couldn’t be more timely.

Talent

And finally, on the matter of the theme of talent – one of the biggest challenges post-pandemic is the global labor shortage and the prevalence of remote work. There are two aspects of this conversation. There is ensuring that we have the right competencies to take our economy to the next level; then there is the retention of same because being able to retain talent is just as important to our success as creating it.

The global shortage of labour in critical job functions poses a significant threat to countries like Jamaica that is large and sophisticated enough to be a hunting ground for talent. Historically, talent has migrated to other countries for more attractive compensation. With the increasing prevalence of remote work, we are now seeing international firms offering local talent attractive job opportunities, with them not having to migrate. The next effect of this is greater talent scarcity and upward pressure on wages, which can be problematic for businesses that can’t scale. This is a real threat that is not going away. As such, we not only just need to be aware of it, we need to convert it into an opportunity.

To benefit from the developments in the global economy and truly transform our economy, it is clear that Jamaica, and I dare say the region, cannot maintain the current status quo. In Jamaica, after taking a hit during the financial crisis of the 1990s, we are now seeing the revival of the entrepreneurial spirit aided by relatively low interest rates and financial innovation that has both reduced the cost of capital and increased the types of capital that is available.

However, given the trends that we are seeing in the international marketplace, to take advantage of this revival and the innovation that we are seeing in the financial services industry, we need to focus on these three themes – identifying and leveraging our competitive advantages, seeking scale and creating and retaining talent. I believe, ladies and gentlemen, that these three themes are the keys to the economic transformation we seek.

MULTI-BILLION DOLLAR FRAUD

Now shifting gears, to what has been making the daily headlines recently – the alleged multibillion occupational fraud that occurred at a securities firm in Jamaica. The incident is of grave concern to us as an industry. It is painful and heartbreaking, and unfortunately, it has set us back as a financial sector.

This incident, which is threatening confidence in the financial sector, does not reflect the state nor conduct of the securities industry as a whole. While fraud will never disappear, fraud of the magnitude that has been alleged, would not happen at a firm with a strong, well-functioning governance framework. In this instance, based on what is in the media, there appears to have been a significant break down in controls and governance.

The industry, as we know it today, has been around for almost three decades having withstood:

– The 2008 global financial crisis;

– The 2010 and 2013 local debt exchanges; and

– The fallout associated with the global pandemic, and more recently, the inflation crisis.

In all instances, during that period, the sector remained resilient, supported by ample capital and liquidity, with no systemic or entity failures. We are the same industry that has been noted for innovation and that has put Jamaica on the global map.

Our industry is plugged into the international markets, having adopted best practices in terms of processes, controls and governance. We are talking about world class settlement and custody platforms, and frameworks, driven by the use of best in class technology. All these technologies reduce the need for human intervention and as such reduces fraud. As such, it is not a surprise that historically, fraud in the sector is minimal.

The alleged incident is unfortunate; however, I cannot overemphasize that as individual firms and as a collective, we take fraud seriously and are against any activity that undermines the credibility of and confidence in the sector.

The Minister of Finance, the Dr. the Hon Nigel Clarke, at his press conference held yesterday, outlined sweeping changes to come, which includes the creation of a single regulator for prudential supervision; a role which is to be ultimately assumed by the central bank.

The JSDA supports actions geared towards restoring confidence in the securities market, as this is needed for us to the continue the contributions that the industry has been making over the past decade plus in building wealth for Jamaicans and providing capital to support the growth of businesses, the transformation of industries and the expansion of the Jamaican economy.

As an industry, our focus will now be on helping to restore public confidence and active engagement of the authorities during the consultation process over the next several months, as they seek to craft the new regulatory framework. This consultation process is critical as we seek to ensure that the outcome results in a healthy balance between prudential monitoring and that of continued market development and deepening.

There is a global market view that bank regulators are typically overly conservative, which is not necessarily supportive of the entrepreneurial underpinnings of the securities market which thrives on innovation, necessarily set within the context of prudent risk management. This is unlike a securities regulator that tends to facilitates market deepening and innovation, within the same context. Our fears, exist in this regard.

However, I can say the fear now is less than say a decade ago, as we are seeing a central bank that is much more market friendly. As such, I am cautiously optimistic that once we get pass the teething pains, we will establish a framework that consists of a robust regulatory oversight, that restores confidence in the sector, but also one that facilitates us achieving our aspiration of being the global niche player in financial services that we have the potential to become.

NCB CAPITAL MARKETS INITIATIVES

Prior to closing, as is customary, I will share a bit about what we have been doing at NCB.

i) GoIPO bond portal
In 2019, NCB Capital Markets pioneered the region’s first paperless end- to-end automated IPO solution called GoIPO. This platform allows investors to participate in equities public offerings and open accounts from the comfort of their homes or mobile devices.

In the coming weeks, we will be launching our GoIPO bond portal. This innovation will allow investors, not just our clients, a digital-first investment experience when investing in local Bond Offers, both public and private.

Available on the GoIPO platform, investors can view all transaction documents for a bond or note offer, digitally. They can complete their bond applications online and submit their accredited investor declarations. Clients will be able to add joint holders and submit their principal, coupon payments, and refund mandate, as well as choose how they would like to fund the transaction. Clients’ JCSD account information will be validated for accuracy to prevent the submission of incorrect data. The entire application process can be completed in less than ten (10) minutes.

Once investors submit their applications they will receive an order confirmation email, with the details of their order, and a follow-up email will be delivered indicating whether their application has been successful.

For all applications that are approved, GoIPO will generate a PDF version of the executed Bond/Note Purchase agreement that will be digitally stamped with the Tax Authority of Jamaica seal. All generated agreements will be attached to the approval email that clients will receive once the offer closes and allocations are complete.

With this innovation, investors can now have the same seamless investment experience when participating in bond offers, that they have come to know and expect for equity transactions.

ii) Continue our initiative with no fees for Junior Market IPOs

As a leading market maker and originator of transactions that span the entire spectrum of the capital structure in Jamaica and the wider Caribbean, we continue to improve and expand how we operate in the equity markets. We also continue to redouble our efforts in engaging our community of companies with private equity investments. Let’s elaborate on those two points, starting with the Junior market.

This year, NCB Capital Markets will resume waiving its arranger fees for companies that have engaged us to list on the JSE junior market. We see this strategy as key for unlocking economic growth by giving companies easier access to the capital markets.

As for private equity, NCB Capital Markets as well as our off-balance sheet platform, Stratus, is committed to supporting promising private companies that might not yet be ready to go public, by making equity investments.

We also provide coaching and strategic advice so that these companies are in a better position to go public in the future. Not being ready for listing does not mean that a company should not be able to access equity capital, and we are prepared to work with companies that are early in their life cycle, but that require equity today.

iii) Guyana entry

Late last year, we opened the doors of NCB Capital Markets (Guyana) Inc. as an advisory firm and now await our securities licence, which will allow us to arrange and deal in securities locally.

The pace, steepness and exponential nature of what is taking place in Guyana is a tremendous opportunity for Guyanese. To benefit, the Guyanese have to access the right scale and type of financing that can navigate fast-paced, commodity-based environment.

The Guyanese will need access to financing at each layer of the capital structure and in scales that single institutions may be prohibited by regulation from taking on their own.

NCB Capital Markets has been working in Guyana since 2014. In recent times we have executed structured finance-type transactions that set the stage for further development of Guyana’s domestic capital markets by enabling external flows of capital into Guyana.

With this, investors both inside and outside Guyana, can gain access to attractive investment opportunities and Guyanese businesses can gain access to a range of financing solutions, including private and public debt; senior, unsecured and mezzanine type syndicated debt; quasi debt and quasi equity; alternative asset type class financing; factoring private credit, etc.

Additionally, the people of Guyana can now gain access to investments created by the capital markets within best practices corporate governance and risk management frameworks and a regulated environment. This has the potential to redefine investment options and access for the people of Guyana and provide investment opportunities to investors across the region.

CLOSING

In closing, the linkage between entrepreneurship and the capital markets is evident. While we work to restore confidence, strengthen prudential regulations and continue to support the development of the capital markets, it is equally important that we are conscious of the global trends and our competitive advantages in creating policies and business strategies. Let’s protect the entrepreneurial spirit. The impact of huge negative shocks can have long, lasting effects that can take generations to undo.

Ladies and gentlemen, thank you for your continued interest in the JSE conference and by extension the development of the regional capital markets. I wish for you an informative and productive next 2 days.

Thank you.

Mr. Steven Gooden, CEO, NCB Capital Markets Ltd. addressed the opening night of the JSE Conference on the topic: “Revival of the Entrepreneurial Spirit and the Redefinition of the Capital Markets”.

Good evening and welcome to the 18th JSE Group’s Regional Conference on Investment and the Capital Markets. We are pleased to be hosting this stellar and premium conference on investments and the capital markets in collaboration with our international, regional and local lead sponsors: Jefferies and NCB Investments Limited and Dequity Capital Management Limited, as well as other invaluable sponsors who have been with us over all these years or those who have recently joined us. We appreciate this vital support which has been the life blood of the event.

Tonight, I celebrate the fact that we are once again congregated in a manner that brings out the best in us, that is the ability to feel the pulse of discussions and to greet each other with a sense of positivity and in a spirit of collaboration. I am pleased that we have returned to a face-to-face setting aided by technology to facilitate those who are unable to be here in person, throughout the three (3) days of conference.

However you choose to join us, we know that there will be significant opportunities available for you to listen, participate, dream and ultimately to innovate and implement. We also know that you will have an enhanced experience this year as we celebrate the18th staging of this forum which is considered the blue ribbon capital markets and investments event in our region.

As capital market operants, we are conscious that as the world turns, the capital markets are not static and are driven by economic activities, entities and expectations of all who operate therein. As we look and plan for innovations, we must plan for the myriad of risks that are around and surround us.

Let us embrace the conference theme: ‘Conference Markets Redefined – Achieving the Impossible’ as it begs us to contemplate how markets can achieve what is impossible. Impossible here is used within the context of the present and how a country, or a region is perceived. However, the impossible calls for visionary thinking that propels us to see the future differently and find how we can make a difference. Therefore, the charge for this Conference is for us as regional leaders in the capital markets, to dare to be different in ways that allow us to shine in technological innovation, developing sustainable products and services and providing solutions that can be adapted globally.

Financial markets ecosystems are changing and with ingenuity comes superior risks and rewards. Therefore, actors in the capital markets must quickly adopt and adapt to new technologies to deliver superior services aimed at surpassing customers’ requirements and expectations and delivering real return on investments. That is how achieving the ‘Impossible’ can and should be measured.

I quote no statistics tonight when I say ‘Re-imagined’ could mean simply getting back to the basics of life, hearts that are pure and a love that endures that would see us building the capital markets on the back of service and care; a care that would drive us to embrace the concept and fact that if we are to build faster and move further, we must collaborate to develop the social sector by improving the ecosystem and concentrating on the social sector as an engine of growth.

During the course of this Capital Markets Conference, we will be delving into solutions that will propel the growth of the capital markets in a manner that democratizes wealth while building sustainable economies. The solutions will provide us with a sense of pride which is more than profits, but one that creates the multiplier effect for the overall upliftment of our people. While we discuss frameworks and governance, let us not be carried away by them but immerse ourselves into the frame of mind to work conscientiously with proper governance systems and procedures, so they live and breathe and take root within the culture of our organization.

It is important that as we navigate through unprecedented changes in the markets that we research fresh approaches that will drive micro and macroeconomic stability for our region. In closing, the Jamaica Stock Exchange wishes to reassure the region and the world that we understand that confidence and transparency drives a market, and we continue to be proactive in our approach to protect those who depend on us to deliver on our promise of mobilizing capital for growth within a fair, ethical, efficient and transparent environment.

As you delve into the upcoming days of conference, I wish you every success. The Conference has been strategically placed at the beginning of the year to help set the tone for the coming months. It will examine issues such as:

Opportunities for growth through investments from the Diaspora;
Doing business in Africa;
*The use of technology to re-shape businesses;
*The digital assets market;
*Food security;
*Alternative investments;
*Corporate governance;
*Renewable energy
And other stimulating topics of discussion.
We will have our always exciting Venture Capital Pitch Room and of course our signature networking event ‘Fashion, Culture & Cuisine’. We have an array of speakers who will stimulate, energize and encourage you to dream the impossible dream; to fight those unbeatable foes; to bear with unbearable sorrow; to run where the brave dare not go, and to reach the unreachable stars.

This should be our quest as we use this Regional Conference to meet, greet and network, knowing that the discussions, deliberations, sharing and caring are the keys to ‘Reimaging the Regional Capital Markets and Achieving the Impossible.

Dr. Marlene Street Forrest, Managing Director, JSE, addressed the opening night of the JSE Conference on the topic: “Capital Markets Redefined: Achieving the Impossible”

Businessuite has not yet secured an interview with Jeffrey Hall, but we’re keeping our fingers crossed for early in the new year. But as one former school mate remarked to Businessuite, “Jeffrey was always a bit ahead of his time from high school days”

The big question now is what is Hall’s next move, how far will he go and what’s his end game.

As noted in an earlier article we suspect that Hall and Joanna A. Banks, who is set to become the youngest and most powerful woman in corporate Jamaica, will have their hands full for the next couple of years with Pan Jamaica Group. But who knows, who saw the Jamaica Producers Group Limited and PanJam Investment Limited deal coming. We think the story is just developing.

So, who is Jeffrey Hall?

Jeffrey Hall CD, BA, MPP, JD was appointed Group Managing Director of JP in 2007 after joining the Board in 2004 and JP in 2002. He currently serves on JP’s Audit, Executive and Corporate Governance Committees. Hall is also Chairman of Kingston Wharves Limited, Blue Power Group Limited, and Lumber Depot Limited, a director of Geest Line Limited, Scotia Jamaica Life Insurance Co. Limited, SAJE Logistics Infrastructure Limited, and Eppley Caribbean Property Fund Limited.

This will all change in the coming days.

Hall has served as Chairman of the Boards of Scotia Group Jamaica Limited, The Bank of Nova Scotia Jamaica Limited, Scotia Investments Jamaica Limited, and has served as a director on the Boards of the Jamaica Stock Exchange and the Bank of Jamaica.

He received his Bachelor of Arts degree in Economics from Washington University, and his Master of Arts degree in Public Policy from Harvard University and his Juris Doctorate from Harvard Law School.

In 2022, he was awarded the Officer of Distinction in the rank of Commander by the Government of Jamaica.

His Sphere Of Power And Influence From Pan Jamaica Group

From all accounts Pan Jamaica Group represents the creation of the quintessential Jamaican conglomerate, a geographically and operationally diversified company focused on value creation for all stakeholders through investment in key sectors of the global economy.

With his final move Jeffrey Hall and Pan Jamaica Group will have JA$112 billion in combined assets and other resources at his disposal. What will he do with it, or better yet what can he do with it?

The transaction as an all-shares transaction, allowed Hall to leverage the JP shares in JP Global to acquire the equity position in PanJam. As a result of this JP will emerge as the largest shareholder with a 34.5 per cent stake in Pan Jamaica Group Limited.

Although Pan Jamaica Group will initially be chaired by Stephen Facey, Hall as executive vice-chairman and CEO combined with his shareholding wields far more power, influence and control on the board and company. He is further supported and strengthen with JP Chairman Charles Johnston, and Chief Financial Officer Alan Buckland who are both expected to join him on the Pan Jamaica Group board.

Note: The transaction will also see the amending of the Articles of Incorporation of PanJam to grant persons who qualify as having a Significant Shareholding the right to appoint three (3) directors to the Board of Directors and to remove and replace the directors so appointed without the approval of the directors or shareholders of the Company. At the Completion Date there will be two Significant Shareholdings entitled to appoint three (3) directors to the Board, JP and members of the Facey Family who are shareholders of PanJam.

Post Deal Jamaica Producers (JP)

Hall will still have oversight and control over JP, and as a separate entity JP will continue to operate outside the new group. The primary business of JP would become the investment management of its shares in, and proceeds from, the new Pan Jamaica Group. JP business model would change somewhat into an investment company that buys ownership stake in other companies without dealing with the day to day operation each business. As a result, JP is to designate a small team of professionals to manage its portfolio of investments and arrange for ongoing governance.

Post deal JP balance sheet will include the following Assets
• Investment Security 34.5% of PanJam
• Real Property (3 Jamaica and 1 UK)
• Agualta Vale Ltd (Land in St Mary)
• Cash and marketable securities ($1.4bil)
• Along with some liabilities that it will retain

It might be in the best interest of JP shareholders to remove Hall as head of JP so as to avoid potential conflict of interest.

To be updated.

How Jamaica Producers Group Has Been Organised To Generate Revenues From A Diverse Range Of Business Lines

Where Will Pan Jamaica Group Rank On The Businessuite Caribbean Top 100?

In A Classic Case of Global Gamesmanship Jeffrey Hall Reverse Engineered A Takeover Of PanJam To Create Pan Jamaica Group and Secure a 30% Stake In Sagicor Group Jamaica In One Move.